Newcastle Municipality mayor and the municipality have welcomed the announcement by ArcelorMittal South Africa (AMSA) that they would continue operations on their Longs Steel business in Newcastle.
Newcastle Municipality said that ArcelorMittal South Africa Limited management on Wednesday briefed mayor, Xolani Dube and municipal management on its decision to continue its long steel production operations in Newcastle, thus ensuring the job security of 3500 employees.
The municipality added that in the month of July 2023, AMSA released a report which gave an outline of the Interim Financial Results for the period ending June 30, 2023, and this also included a discussion of the operations, and a headline loss of R488m against earnings of R3,025m.
“This followed the steel giant’s disclosure that its share price had plummeted, with shares dropping by just over 40%. In their report, the AMSA stated that profitability was impacted by weaker economic activity, load shedding, operational inefficiencies, rising prices for raw materials (ie iron ore, coking coal, and scrap) and other factors.”
The municipality said that on November 28, 2023, an announcement was released which gave indication of the intention to wind down the long business (production of long steel products), and this according to AMSA would eventually lead to the retrenchment of approximately 3500 employees.” Furthermore, the intended wind down was supposed to affect Newcastle Works; Vereeniging Works; and ArcelorMittal Rail and Structures.”
The municipality added that it was a long process to get to this point. “Following extensive engagements between ArcelorMittal, His Worship the Mayor of Newcastle Cllr DX Dube, municipal management and other key role players in the recent months as well as the continued implementation of the identified short-term interventions and other medium to long term sustainability measures, ArcelorMittal South Africa Limited management yesterday the 3rd of July 2024 briefed His Worship the Mayor Cllr DX Dube and municipal management on its decision.”
Dube said that as a political head and mayor of all Newcastle residents, he is humbled and welcomes the wonderful news which have been officially communicated by ArcelorMittal South Africa.
“This will ensure job security for the 3500 employees who were uncertain of their future for the past 12 months. The decision will also bring comfort to the municipality as the very same employees are also customers to the municipality in terms of the consumption of basic services. And the continued operation of Newcastle Works indicates that Newcastle is still open for business, and thus attracts investment that will lead to an agglomeration of economies.”
Dube added that ArcelorMittal South Africa Limited remains one of the key performers in Newcastle, and the municipality is dedicated towards ensuring business retention and expansion of local business.
The Mercury